Queensland veto means no NAIF loan for Adani rail

MEDIA RELEASE

12 December 2017

The Northern Australia Infrastructure Facility (NAIF) cannot loan public money to Adani’s Carmichael coal project without the consent of the Queensland Government, lawyers have confirmed.

Re-elected Queensland Premier Annastacia Palaszczuk has written to Prime Minister Malcolm Turnbull stating

‘…my Government provides formal notification to the Commonwealth that financial assistance should not be provided to Adani for the North Galilee Basin Rail Project. As such the Government is exercising its veto right under section 13(4) of the Investment Facility Mandate in response to the Adani loan application.’

The NAIF Act, which governs NAIF, obtains its power from section 96 of the Constitution which provides ‘… the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit’.  

But to guard against the Commonwealth straying into areas of State power, such grants must be ‘consensual’. Chief Justice Barwick in Victoria v The Commonwealth (1975) stated:

Thus, although in point of economic fact, a State on occasions may have little option, these intrusions by the Commonwealth into areas of State power which action under s. 96 enables, wear consensual aspect.

This requirement is reflected in section 13(4) of NAIF’s Investment Mandate:  

The Facility must not make an Investment Decision if at any time the relevant jurisdiction provides written notification that financial assistance should not be provided to a Project.

“Premier Palaszczuk’s letter of veto today makes it clear Adani’s Carmichael project is ineligible to receive a NAIF loan,” said Environmental Justice Australia lawyer David Barnden.

“Queensland’s veto reflects Australians’ disdain for public funding of new coal projects.

“Nearly three quarters of Australians think Adani should fund its own project.*

“Christina Figueres, the former UN climate change executive secretary, and Oliver Yates, former CEFC head, have both voiced concerns about the loan’s inconsistency with the Paris Agreement.

“A risky, taxpayer subsidised loan to exploit a huge, untouched coal basin at a time when the Great Barrier Reef is almost half dead and under extreme stress would be unconscionable and severely damage the government’s reputation.

“Public finance for this unviable project would be a subsidy to damage the climate and the Great Barrier Reef – the Commonwealth government should rule out any future moves to fund Adani.”

* Stop Adani Alliance ReachTEL poll, March 2017

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